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					</table>The Ministry of New and Renewable Energy (<a href="https://mnre.gov.in/" target="_blank" rel="noopener">MNRE</a>) has clarified that Central Financial Assistance (CFA) for rooftop solar systems would be calculated as per the revisited Goods and Services Tax (GST) if the price discovered in the tender excludes GST rates and invoices of the commissioned systems are issued on or after October 1, 2021.
MNRE has notified that the old GST rates would be applicable for invoices raised before October 1, 2021. To calculate the CFA, this GST would be added to the benchmark or the tender cost, whichever is lower.
Earlier, MNRE <a href="https://mercomindia.com/mnre-lowers-benchmark-costs-rooftop-solar-projects-fy-2022/" target="_blank" rel="noopener">reduced</a> the benchmark costs, excluding the GST, for grid-connected rooftop solar systems for 2021-22. The revised benchmark costs for general category states vary from ₹35.89 (~$0.48)/W to ₹46.92 (~$0.62)/W (for capacities up to 500 kW). Earlier, they were in the range of ₹39.08 (~$0.53)/W to ₹51.1 (~$0.69)/W. In its latest notification, MNRE had said that after the revision of GST rates for renewable energy equipment, it decided to revise the benchmark costs excluding GST.
If the price discovered in the tender included GST rates and the tender specified price revision in case of tax rate change, the increased GST would be allowed while calculating CFA.
MNRE informed all state implementation agencies that they should submit a separate list of systems for which revised GST is applicable along with the invoices while claiming CFA. They should also submit a declaration that documents have been checked to ascertain revised GST&#8217;s applicability.
In September, the GST council stated that for &#8216;specified renewable energy parts,&#8217; the GST would be increased to 12% from the earlier 5% from October 1, 2021.
The GST Council&#8217;s recommendation to <a href="https://mercomindia.com/developers-worried-gst-hike-solar-modules/" target="_blank" rel="noopener">raise</a> GST on solar components from 5% to 12% has project developers worried about its impact on project costs. Solar developers said that the increase in GST could make many of their solar projects unviable.
Over the last six months, solar developers have faced significant challenges due to the rising price trends in <a href="https://mercomindia.com/solar-module-prices-remain-high/" target="_blank" rel="noopener">solar modules</a> and <a href="https://mercomindia.com/commodity-prices-continue-rising-solar/" target="_blank" rel="noopener">commodities</a> like steel, aluminum, and copper. The increase in GST would increase the challenges as the sector has just begun to recover from the impact of Covid-19&#8217;s second wave.
Subscribe to our real-time <a href="https://mercomindia.com/product/mercoms-renewable-energy-regulatory-updates/" target="_blank" rel="noopener">Regulatory Updates</a> to ensure that you never miss any critical updates from the renewable energy industry.

Revised GST for Rooftop Solar Systems With Central Financial Assistance

In the wake of the disruptive second wave of the Covid-19 across the country, the Ministry of New and Renewable Energy (<a href="https://mnre.gov.in/" target="_blank" rel="noopener">MNRE</a>) has announced that for renewable energy projects that are implemented from April 1, 2021, the submission of physical copies will be waived off. The implementing agencies will accept digital copies of the invoices.
The arrangement will continue for a period to be decided based on the Covid-19 developments in the coming weeks.
The Ministry decided to temporarily do away with hard copy submissions after it received representations from various stakeholders seeking relief on the grounds that submitting physical documents is increasingly getting difficult due to the pandemic-related restrictions and the lockdown measures being imposed in many states.
In April last year, MNRE had <a href="https://mercomindia.com/mnre-addresses-invoicing-issues-faced-renewable-generators/" target="_blank" rel="noopener">issued</a> a similar memorandum, addressing problems that renewable energy generators were facing while invoicing for renewable energy supplied amid the virus outbreak.
As per the latest notification, during the period, in cases involving joint meter reading, where signing is difficult, soft copies of invoices based upon the self-meter readings by the renewable generators, duly substantiated by photographs of the meter reading and downloaded meter data, will be accepted.
In cases where the self-meter reading is not possible, the implementing agencies may choose to pay the bill based on the readings of the same month of the previous year or invoice of the previous month if it is lower.
Once the period for which this arrangement will be applicable ends, normal invoicing will be resumed, and within 15 days of the last date of such period, renewable energy projects will have to submit hard copies of invoices for this period for necessary adjustment in the subsequent bill.
During the first wave of the Covid-19 pandemic, MNRE had <a href="https://mercomindia.com/mnre-asks-state-electricity-regulators/" target="_blank" rel="noopener">requested</a> the state electricity regulatory commissions to allow the online listing of petitions and hear urgent matters through video conferencing. The Ministry’s move had come after it had received a letter from renewable energy developers, requesting it to issue an advisory to all the state commissions to start digital listing and hear important cases online.
Last year, the Solar Energy Corporation of India had also <a href="https://mercomindia.com/seci-discom-digital-invoices-coronavirus-lockdown/" target="_blank" rel="noopener">requested</a> the state distribution companies and agencies to submit invoices digitally during the first wave of the Covid-19 pandemic.
Subscribe to Mercom’s real-time <a href="https://mercomindia.com/product/mercoms-renewable-energy-regulatory-updates/" target="_blank" rel="noopener">Regulatory Update</a> to ensure you don’t miss any critical updates from the renewable industry.

MNRE Allows Digital Invoices for Renewable Generators Amid Covid-19 Resurgence

With the country under lockdown due to the COVID-19 pandemic, the Solar Energy Corporation of India (<a href="https://www.seci.co.in/" target="_blank" rel="noopener noreferrer">SECI</a>) has requested all state distribution companies (DISCOMs) and agencies to allow submission of invoices digitally.
According to SECI, the submission of digital invoices will make it feasible to release the payment to developers, making their projects sustainable.
Referring to the nationwide lockdown, SECI added that the majority of states are taking strict action on non-essential movement under the Epidemic Disease Act 1897.  “Considering electricity is a required essential service, renewable energy projects even through this hard time are working in full swing despite the implied restrictions,” states SECI’s letter.
Prime Minister Narendra Modi-led government has called for a 21-day lockdown in the country, which has also led to restrictions on the movement of public and opening of offices and other establishments. The lockdown, which started from March 25, 2020, will continue until April 14, 2020.
Further, SECI said that keeping in mind the bill recoveries of the DISCOMs, the Ministry of Power (MoP) has issued directions to the Central Electricity Regulatory Commission (CERC) to provide a moratorium of three months to the distribution companies to make payments to the generating companies and transmission licensees. The MoP has also requested the state governments to issue similar directions to state electricity regulatory commissions (SERCs). The Ministry also announced that the central public sector undertaking (CPSU) generation and transmission companies would continue to supply electricity, even to DISCOMs, which have substantial outstanding dues to the generation companies, as reported by <a href="https://mercomindia.com/discoms-moratorium-power-generators-covid-19/" target="_blank" rel="noopener noreferrer">Mercom</a>.
SECI has also mentioned that due to the present conditions and to protect and safeguard the health and well-being of its employees against COVID-19, it has encouraged its employees to work from home.
“In this process, SECI’s office is closed until the lockdown period due to which it is not viable for power developers to submit the energy invoices in SECI’s office, and similarly SECI cannot raise the hard copy of the invoice of its buying utilities,” states the letter.
SECI also pointed out that since it’s a trading agency and its income is limited to the trading margin, it cannot make payments against invoices without disbursements by utilities buying power even though they are consuming the energy generated.
The economic and social repercussions of the ongoing pandemic have started to hit India, and the power industry is grappling with lower collections, subdued demand, and difficulty in operationalizing assets. You can track the latest updates related to the impact of COVID-19 on renewable and power industries <a href="https://mercomindia.com/indian-solar-industry-coronavirus-crisis/" target="_blank" rel="noopener noreferrer">here</a>.

SECI Asks DISCOMs to Allow Digital Invoices Amidst Coronavirus Lockdown

The Central Electricity Regulatory Commission (<a href="http://www.cercind.gov.in/" target="_blank" rel="noopener noreferrer">CERC</a>) has passed an order that will give compensation relief from the safeguard duty to four developers after they petitioned the commission citing the Change in Law clause. The clause recognizes contracts that are already in force when a law change occurs, like in the case of the safeguard duty.
Four petitioners &#8211; ReNew Solar Power, Phelan Energy India RJ Pvt. Limited, Clean Sustainable Energy Pvt Ltd, and Mahoba Solar (UP) Pvt Limited. The companies had filed the petition against SECI, BSES Yamuna Power Limited, Jaipur Vidyut Vitran Nigam Ltd, and Ajmer Vidyut Vitran Nigam Ltd, and Jodhpur Vidyut Vitran Nigam Ltd, filed for relief, seeking compensation of the safeguard duty on the imports of solar cells and modules.
“Such imposition of safeguard duty may result in an increase in non-recurring expenditure as well, if certain modules are imported as a part of O&amp;M up to July 30, 2020,” states the petition.
The four petitioners have asked for lump sum compensation of ₹739.5 million (~$10.5 million) to be paid to the petitioner on account of the additional levy of safeguard duty and IGST on importing solar cells, along with interest. They have requested CERC to direct the SECI to pay within 60 days from the date a claim was filed by the petitioner, failing which it will attract late payment surcharge as provided under PPA.
SECI had selected ReNew Solar Power, Phelan Energy India RJ Pvt. Limited, Clean Sustainable Energy Pvt Lit, and Mahoba Solar to develop solar projects in Rajasthan’s Bhadla Solar Park. The four solar developers submitted bids and separate PPAs were executed for the contracted capacity of 50 MW each. According to Mercom&#8217;s <a href="https://mercomindia.com/product/india-solar-project-tracker/" target="_blank" rel="noopener noreferrer">India Solar Project Tracker</a>, SECI auctioned 250 MW Bhadla Phase IV solar park project &#8211; out of which Phelan Energy got 50 MW and they signed PPA on November 2017.
The commission has directed the four petitioners to submit to SECI all the relevant documents showing a clear and one-to-one correlation between the projects and the supply of imported goods until the scheduled commissioning dates.
The commission has directed SECI to reconcile the claim related documents within 15 days of submission by the petitioners. The commission has also suggested that the petitioners and SECI can mutually agree to a mechanism for the payment of compensation on annuity basis spread over a period not exceeding the duration of the power purchase agreements as a percentage of the tariff agreed in the PPAs.
In September 2019, <a href="https://mercomindia.com/safeguard-duty-considered-acme-solar-projects/" target="_blank" rel="noopener noreferrer">Mercom</a> reported that the Karnataka Electricity Regulatory Commission (KERC) stated that the imposition of the safeguard duty would be treated as ‘Change in Law’ for ACME Solar’s projects in Karnataka.
In <a href="https://mercomindia.com/solar-safeguard-duty-change-in-law-merc/" target="_blank" rel="noopener noreferrer">February this year</a>, the Maharashtra Electricity Regulatory Commission in its order also reiterated that the safeguard duty is an event of Change in Law, and therefore, the additional expenditure and other impacts will be considered for reimbursement.

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